The Relationship Between Happiness and Foreign Direct Investment in African Countries

Caroline Wanjiru Kariuki () and Jeniffer Wairimu Karanu
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Caroline Wanjiru Kariuki: Institute of Mathematical Sciences, Strathmore University, Nairobi P.O. Box 59857-00200, Kenya
Jeniffer Wairimu Karanu: Independent Researcher, Kiserian P.O. Box 60-00206, Kenya

Economies, 2024, vol. 12, issue 12, 1-12

Abstract: This research looks into the relationship between happiness and foreign direct investment (FDI) in African countries so as to shed light on whether or not the inward FDI stock in African countries has an influence on happiness in the region. The study utilises annual panel data from 2006 to 2022 for 46 African countries and uses the Cantril life ladder data as a measure of happiness. The findings from this research reveal that there is a positive but statistically insignificant relationship between inward FDI stock and happiness in Africa. The results suggest that FDI alone does not directly contribute to economic development in African countries, but rather the benefits of FDI may be contingent on other factors in the country. Nonetheless, the positive relationship observed provides a foundation for policymakers to encourage FDI, as it has the potential to improve happiness levels in African nations. Additionally, the results from this study show that the level of happiness in the previous year and social support have a positive and statistically significant effect on happiness in African countries.

Keywords: happiness; foreign direct investment; Africa; panel data; system GMM (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
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